Arbuthnot Banking Group is to float its retail subsidiary, Secure Trust Bank,
at 720p per share, valuing it at £102m, via a placing of almost a quarter of
its equity next week on AIM.

The remaining 75.5pc stake will be retained by Arbuthnot, which is controlled by Henry Angest, the multi-millionaire and Conservative Party donor.

The flotation should raise £25m, with the £9.8m proceeds from the sale of new shares to be used for "significant expansion" of Secure Trust's loan book and possible acquisitions.

Paul Lynam, Secure Trust's chief executive, said: "We have grown the loan book in the past 12 months to the end of the June by almost 100pc on the back of a 47pc increase in our customers. We have more people looking to borrow from us, frankly, than we have had the capital available to support."

The retail bank lends in motor finance, retail point of sale and personal unsecured lending. Its half-year pre-tax profits this year were £5m.

Mr Lynam said: “Unlike most banks we have significantly more deposits than we have loans. It’s a question of us being able to expand what we already do and as we build out over a three-to-five year period, undoubtedly we will be launching further products and services which may include moving into certain other parts of the asset finance market.”